Fundraising · Loans

What is the best way for someone in school to secure a loan to develop a viable prototype?

Ryan Ballard Ambitious.

December 28th, 2019

I have a personal flying machine concept but not the funds to build it.

Chicke Fitzgerald 𝗘𝗻𝗴𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝗲𝘅𝗽𝗲𝗿𝘁 𝘄𝗶𝘁𝗵 𝗮 𝗳𝗼𝗰𝘂𝘀 𝗼𝗻 𝗴𝗶𝘃𝗶𝗻𝗴. 💡 I zig where others zag #͏z͏i͏g͏w͏i͏t͏h͏c͏h͏i͏c͏k͏e

January 2nd, 2020

Ryan - money isn 't the answer. You must start by understand the step by step guide to building a great company. Buy a copy of The Startup Owner's Manual. You have to do a lot of work before raising money and building even your prototype. It will save you a lot of heartache to learn about the market entry challenges. It isn't just about having a better mousetrap.

Sheeba Pathak Solopreneur

December 28th, 2019

You could check with your school's entrepreneurship funding opportunities

Next up depending on your idea, try those who develop prototypes to get it at a nominal rate.

Lastly well raise funds on crowdsourcing platforms-you could even try developing it in-house at a small scale with materials around you and then take it to a lab later


Gareth Hughes Pursue your passion, enjoy life, give back.

January 10th, 2020

You're too early for a loan. Entities providing loans are quite risk averse. Either you won't qualify or the terms will be outrageous. Others have mentioned some good options, here's a summary of potential funding opportunities:

  1. Your school - as a student you may have possible funding options right at the school. Many schools now encourage entrepreneurship and have resources available to students. There may be some incubator at your school or even small amount of funding available.
  2. Local incubators and accelerators - depending on where you live, there may be an incubator or accelerator that would like your idea and provide some initial funding, typically for some equity in your business.
  3. Friends and family - many entrepreneurs start with obtaining funding from friends and family. Just make sure they know the risk of potentially losing their money and everyone needs to be comfortable with that possibility.
  4. Grants - there are many grant opportunities out there at the federal and state level. Your school may be able to guide you there. Check out Grants.gov and search for grants that may be relevant. Federal grants are quite competitive, so you should have a team put together before submitting such a grant. The upside being that when awarded a grant, you don't have to give up equity in your business or pay the money back.
  5. Business Plan competitions - many universities host annual business plan competitions. As with grants, you'll want to have a team in place. These competitions are a good place to start as a student as you'll need to have a business plan and pitch deck in place. Going through the business planning process will help you refine your idea -- keeping in mind that a business plan is never complete, it's a continual work-in-progress. So, don't get stuck in planning paralysis either.

Before you start any of this though, get some feedback from potential end users to make sure you have a viable and desirable product.


Best of luck!

Mr. Kelly Johnson Looking for Co-founder

December 31st, 2019

It's all about getting people in your court. Especially considering you probably don't have a lot of experience in any part of the process being so young. You need supporters.


Inventions don't happen in a bubble, you can't do it yourself. You will need help from others if for no other reason than to check your assumptions. Many young people don't realize that a product is not a business, and a concept is not an invention.


A personal flying machine no doubt requires significant engineering skills. Assuming you are not an engineer, you have to be able to convey your concept and how you solve problems that make it possible. I've found the best way to do this in my physical designs is to start with hand sketches. If you aren't good at drawing, find someone who is. Again, it's all about getting others to "Get it" and like the idea and your ability to make a successful business out of it. But more importantly, what's in it for them if they help you.


I have also found that making physical models out of anything around the house or garage or local hardware store can go a long ways.


Edward de Jong Software designer and developer, programming language designer

December 31st, 2019

Mark Cuban, the famous entrepreneur often remarks that you are a fool to borrow money for a startup. The reason he says this is that you never know exactly how long, and thus how much money, you are actually going to need. Inventors and entrepreneurs are optimistic people in general, and the consequences of being 6 months late when your loans run out could be catastrophic. The reason VC's are rich and many inventors are not, is that the VC's know that it will take longer and more money to get off the runway, and each "visit to the well" as they call it, causes a loss of stock ownership, with negative consequences. So even if you could obtain a loan, it would not be wise.

Anuj B. Gopal Serial Entrepreneur who scaled a bootstrapped AIoT startup to clock $55M revenue | www.anuj.live

Last updated on January 2nd, 2020

Hey Ryan,

Do the market research first to know who all are interested in building such product and then approach them with a plan + model.

  1. For market research, you may look at automobile/respective industry leaders, scientific research institutes and startups.
  2. Your plan should detailed about your innovative approach to build such product, preferred tech-stack, and why you're the best team for this job? If you aware of business, customer and commercial constraints then add a section about them as well (optional).
  3. It would be good if you can create a good animated or visual model of your 'personal human flying machine'. I would recommend you to create a short video. Otherwise you may use some reference video like this to present an idea of your solution.
  4. And finally you may approach them via scientific/industrial events, Startup forums, Incubators or simply via LinkedIn.

It's good to have an idea, better to have a plan and best to have a model/mvp with enthusiastic team members.

Please feel free to contact me if you require further assistance. All the best.


Regards,

Anuj || www.anuj.live

Paul Garcia marketing exec & business advisor

January 11th, 2020

A prototype isn't a company, it's a project. You don't need to build the machine, but you do need to figure out how your company is going to make money, how much all the manufacturing (and other) elements are going to cost, and make the adjustments necessary to ensure you have a business beyond the idea for a product. Investors (including banks and others that issue loans) invest in (tested) plans, not ideas. A prototype might prove your manufacturing capability but it does almost nothing to prove you have a business.